More Details on C Band, 6 GHz for Wi-Fi, Could Come at CES Next Week
CES will give FCC Chairman Ajit Pai an opening to further lay out plans for commission action on the C band, industry officials said. It's the first CES since the broader launch of 5G in the U.S., and numerous federal policymakers are expected to speak. Most policymakers stayed home for the 2019 show because of the prolonged federal shutdown. Industry officials said 2020 is shaping up to be a big year for spectrum and 5G, and for Wi-Fi and unlicensed. Pai is expected to circulate a 6 GHz item, the key Wi-Fi band, most likely for the March meeting.
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Pai speaks Tuesday, the day before his blog on the Jan. 30 commissioners’ meeting and two days before orders are to be circulated. Pai’s plans on the C band appear to still be taking shape and the FCC wants big players to develop a plan that can gain consensus among most stakeholders, industry officials said. The FCC didn’t comment.
The FCC is running into problems with jurisdictional issues and a vote is unlikely in January, said a former FCC spectrum official. “I don’t doubt that they will get something done,” the lawyer said: The FCC "can at least start an auction by the end of the year.”
If Pai “sticks to the high level principles, as he has done at the congressional hearings and other public forums, then he could announce a vote at the January or February meeting, but it would not move the ball forward, at least from a Wall Street perspective,” New Street’s Blair Levin told us: “If, however, he starts to address the myriad of details about the auction, the transition, payments to be made to various stakeholders, and the rights and obligations of various stakeholders, then it would be a meaningful event in terms of helping Wall Street understand the likely direction and timing of the process.”
“One thing everyone agrees on is that getting underutilized C band spectrum freed up for 5G applications is in everyone’s best interest.” said Larry Downes, public policy project director at the Georgetown Center for Business and Public Policy. “Pai has concluded that the FCC can best achieve that goal and maximize public benefits through an FCC-engineered auction and repacking process.”
Downes said questions remain. “There’s no question that Pai, in large part through creation of the Office of Economics and Analysis, has greatly improved the speed and efficiency with which the FCC can design and execute spectrum auctions, and do so without saddling them with the kind of limitations and political favors unconnected to the public interest that plagued some earlier auctions,” he said: “If the agency can pull it off by the end of 2020, I can’t see how anyone has cause to complain.”
The C band is “valuable Goldilocks spectrum,” offering a balance of capacity and coverage for 5G, said Brent Skorup of the Mercatus Center. There has been “lots of lobbying about who gets access to it and who gets paid,” he said. “For decades the FCC has repurposed spectrum on an ad hoc basis using different mechanisms to transfer spectrum from legacy users to new users.”
Rather than “up zone” the C band, allowing incumbents to sell their spectrum privately, “as the incumbents wanted,” Pai “has pledged to conduct a public auction so that auction proceeds can go to federal deficit reduction,” Skorup said: “The FCC will likely take comments on the best way forward and I wouldn’t be surprised if an overlay license auction or an incentive auction, or some combination of the two, are on the table because both types of public auctions were pretty successful in the past.”
“The key question is whether a mechanism can be established to ensure that the new satellites needed for a rapid transition are ordered before the auction takes place,” said spectrum and satellite consultant Tim Farrar. “That will require the cooperation of the satellite operators, which is unlikely to be forthcoming unless there is clarity on how they will be incentivized,” Farrar said: “Although it is a good sign that Pai is looking to move quickly, it remains to be seen how the satellite operators will respond to his comments and whether a January order will be able to provide a clear road map to incentivizing the satellite operators or if this element is deferred to the next phase of the FCC proceeding.”
Free State Foundation President Randolph May regrets Pai has given up on a private sale of the C band. “I now hope that the FCC comes up with a plan that retains sufficient financial incentives for the incumbent satellite companies to give up enough C-Band spectrum to spur 5G deployment in a timely fashion,” he said. “Without sufficient incentives, the whole process could bog down in significant delays,” he said.
A public auction “provides the most prudent policy decision for spectrum management and will be the most equitable step along the 5G continuum,” said Business in the Public Interest Chairman Adonis Hoffman.